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    Home » IT services » Patchy recovery for South Africa’s ICT sector after pandemic

    Patchy recovery for South Africa’s ICT sector after pandemic

    By Staff Reporter12 April 2022
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    While the global ICT industry is returning to its previous growth levels, in South Africa the recovery is more patchy, occurring at different rates within the various sub-sectors due to structural changes in the ICT sector.

    This is one of the findings in local research and consulting firm BMIT’s latest ICT market overview and sizing report.

    The growth of the ICT sector is returning to a steady 5-6% despite end customers facing challenges. A quarter of business customers surveyed by BMIT said their own revenues were still down compared to 2019 and this can be attributed to the lingering impact of pandemic.

    The growth of the ICT sector is returning to a steady 5-6% despite end customers facing challenges

    A third of mid-sized companies indicated some growth from pre-pandemic levels, showing the hit-and-miss effect of the pandemic, with some industries doing well and others, especially the travel and hospitality industries, still struggling.

    Spending on IT hardware, software and services bounced back significantly in 2021 from dismal spending in 2020. Overall IT revenue growth was 6.5%, but business telecommunications spending declined overall. The overall revenue growth of the IT and telecoms industries together in South Africa came in at 3.7% last year, which is lower than the global average.

    Telecoms companies reported significant cutbacks in business customer spending, while the residential broadband market grew notably last year at a 17.5%, showing clearly how critical home Internet is in a pandemic. The growth occurred despite massive price and performance increases seen in both fixed and mobile broadband offerings, in what is a highly competitive market space.

    BMIT predicts the ongoing roll-out of fibre in both the home and business segments. The roll-out and adoption of fibre is moving rapidly to customer affordability, while fixed-mobile broadband remains a significant gap solution.

    South African ICT market growth in 2020 and 2021. Source and image: BMIT

    Other IT drivers unpacked in the report include digital transformation, automation and e-commerce. Digital transformation has been embraced by organisations as they come to terms with operating in the world of remote work and hybrid workplaces. Due to the shift in mindset required to adapt to the new nature of business, companies are more open to evaluating and using emerging technologies that prove to benefit operational cost reduction, improve customer service and retain competitiveness.

    What is evident in the report and its projections is that while certain ICT business areas have shown growth, others have seen strong performance.  – © 2022 NewsCentral Media



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